Your wallet has the encryption keys. The blockchain has the addresses, and everyone mining bitcoins has information on every bitcoin transaction through the blockchain. That's how a transaction is verified as legitimate.

If you can interact with an object, the object is physical, because you are physical.

^This.

Example:"A computerDollar cares as much about the number One as it does about D. " "A computerGold Bar cares as much about the number One as it does about G. " "A computerCar cares as much about the number One as it does about D. "